Tiffany Cherry: As we near the end of the financial year we are bombarded by health insurance ads that tell us to join us before June 30 to save tax; but what does that actually mean and how much tax are we actually saving? Well Anne Humphrey from HIF and Executive Manager joins us to hopefully answer those questions – thank you.

First of all Anne, I want to ask you...

What is the Medicare Levy Surcharge (MLS)?

Anne Humphrey: Look it is very confusing. The tax that’s referred to in the ads is the Medicare Levy Surcharge and it’s a Federal Government initiative designed to take the burden of the public health system. So it’s essentially an additional tax that’s applied to singles earning over $90,000 a year and couples earning over $180,000 a year that don’t have private hospital cover. So it’s essentially the Government saying we think these people can afford to take out private hospital cover and the surcharge is between 1 and 1.5% of your taxable income and that depends on how much you earn.

Anne Humphrey: Yeah, and there’s a range of covers from very basic to quite comprehensive. But if all you’re trying to achieve is to avoid the surcharge then you can take out a very basic level of cover like HIF’s GoldVital and you can avoid the surcharge. So for an example if you’re earning $95,000 a year the surcharge will be $950; you could take out GoldVital for under $700 a year and there you’ve got a $250 saving, plus you’ve got cover for accidents and a few common procedures.

Sam Wood: What I don’t understand is why its never been explained to me that simply? I’ve spoken to my accountant, I’ve spoken to who I have health cover with for hours and still didn’t quite understand it, and now I understand it.

Casey Beros: Anne, just so we’re being clear, we’re talking about hospital cover here but if you are going to go for extras cover you want it to suit your lifestyle because none of us like paying for things that we don’t need.

Anne Humphrey: Absolutely. You’ll only avoid the surcharge if you have hospital cover; and if you’re taking extras cover you’ll want to make sure you are covered for the things that you need. It’s always a good idea to have dental but you may also need optical, physio and chiro and there’s many other services you can be covered for too.

Tiffany Cherry: Well is there anywhere that people can go to get more information in terms of what kind of cover they can take out?

Anne Humphrey: Absolutely! Visit hif.com.au and you can find the whole range of covers we offer. Additionally we have an MLS calculator so you can actually work out what level or surcharge might apply to you.

Anne Humphrey: Oh and Tiff it’s important to note that you do pay the surcharge for every day that you don’t have hospital cover. So if you’re rushing at the end of the year to take out cover your savings are going to be next year not this year.

Tiffany Cherry: Alright, thank you so much Anne for coming in and thank you for shedding light and something that can be quite confusing.

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